B2B Category Creators Episode 7 Transcript

Mark Huber

Mar 16, 2021

B2B Category Creators Episode 7 Complete Transcript

Gil Allouche:

Well, happy Friday. Thank you for joining. I’m very excited to have you both on the podcast. I got a chance to speak to both of you before, so you’re aware of how this goes. I’m going to introduce the podcast in a second and start by saying my name as well introduce the two of you just by name and then I’ll ask you to introduce yourselves, say a few words for whoever doesn’t know you and then we’ll jump right into it. Cool?

Joe Chernov:
Yap.

Dee Anna McPherson:
Sounds good.

Gil Allouche:
Awesome. Thank you, Joe. Thank you, Dee Anna. It’s great to see both of you, I’m very excited about this episode today. So we’re in the category of creator of podcast, my name is Gil Allouche, I’m the founder and CEO of metadata.io. Let’s get to meet the guests. Dee Anna, maybe you can start? Introduce yourself for the audience, the people who don’t know you.

Dee Anna McPherson:
Sure. Thanks for having me today. So I’m Dee Anna McPherson, I’m the CMO at Invoca. I’ve been with the company about a year, and we’re in the conversation intelligence space. Previously I also ran marketing for Hootsuite and Yammer, so three different times kind of creating categories in very different stages.

Gil Allouche:
Yes, very exciting. I remember in our chat, you pulled up some really interesting examples, when to create a category, when not to create a category, some of those signals, so I’m excited to hear from all the experience you got through. Joe, you’re next, maybe tell us a little bit about yourself to the rest of us.

Joe Chernov:
Sure. I think my old CEO once said, “Yammer is my Twitter.” My name’s Joe Chernov, I lead the marketing team at Pendo. I’ve been here going on two years next month. And prior to Pendo, I had run the content programs at Eloqua, going back several years, and HubSpot a few years later and some smaller startups peppered in between. Glad to be here.

Gil Allouche:
Super. Awesome. Well, let’s kick it off. One of the things that we really concentrate in the category creators is no secret about category creation. The impetus behind it is that many entrepreneurs are keen, passioante, being pushed to create a category for all kinds of reasons. We’re trying to demystify that concept. Should you create a category? When? How do you create it? How do you know it’s actually happening? So on and so forth.
So we’d love to get your kind of first thoughts, and we can start with you, Joe. What do you think about creating a category? Are you trying to create a category with Pendo or with a previous company?

Joe Chernov:
Yeah, when I joined Pendo, I think we thought we were trying to create a category, but I never really bought it. What we were doing is rolling up adjacent categories into one and so if you squint, maybe that’s creating a category, but we were the only one in it so it’s not really a category. We’re a company that is … We are the product stack for a head of product. And so we have product analytics, in-app guidance, feedack colleciton. These were all kind of discreet categories, and our mission was to be horizontal, be it all in one play. We were looking at the all in one play as a category, but I don’t think that in and of itself makes for a category.
Now, where we’re going and we can talk about this later, I don’t want to dominate, but where we’re going, we will need to create a category for, because it’s more elementally disruptive than a roll-up of knowing things.

Gil Allouche:
Interesting. Okay. So you talk about you had a few subcategories, maybe that you’re thinking about consolidating, but maybe where you’re going to the future is more disrupticve and actually merits its own category.
Dee Anna, what’s your thoughts from your experience in a few different companies that created categories?

Dee Anna McPherson:
Yeah, so if I think back to my time at Yammer, I joined there in about 2010 and the company had launched maybe a year or so before that. And they launched at TechCrunch disrupt and actually won that competition. And they were sort of dubbed by the media were Twitter for business.
And it was this new emerging category of a new way to communicate inside your company. And there were other companies that sort of played on the margins, there was certainly companies that, SharePoint, that’s how you should share information on your company intranet. And of course there was email and social in the enterprise was just starting to emerge. And then the whole business model of freemium and the enterprise that was new too. So we don’t look like anything else that was out there.
So, we really, that was the one case where we created a category and we named the category and the market did follow. So Forrester and Gartner actually ended up adopting the terminology that we coined. So that was one successful case where it made a lot of sense because it was a completely new product.
In other cases you are changing the way things are done, and in that case it may make sense to play in an existing category and dominate that category. But if you’re doing something that the market’s never seen before, then at that point you need to define it and you need to evangelize the category.

Gil Allouche:
Interesting. Can you maybe walk us through briefly, walk us through maybe visually, how did you get from doing something disruptive that you knew was maybe not the covered event to getting the Gartner and the Forresters of the world to repeat the same words, the same lingo that you wanted to … the narrative that you wanted to promote?

Dee Anna McPherson:
Yeah, so the blessing and the curse of the early days of Yammer is we had a lot of attention, but we had a lot of negative attention. A lot of people just hated us, the analysts hated us, they would actively blog and share on Twitter how horrible we were, they called us the drug dealers of the software industry, that we were like the smoke that would kind of sneak in under your door and choke you.
So there was a lot of negative attention, because this model of allowing employees to go choose what software you want to use in your company, and then the virality that was built in that encourage you to invite all of your other coworkers to join. At the time prior to that, IT people chose what software you were going to use inside your company, and then they would roll it out. So this was really disruptive and we were pissing off our would be customers, paying customers. So, we launched with a lot of attention, and I completely forgot the question.

Gil Allouche:
No, this is great, this is a good story. So [crosstalk]-

Dee Anna McPherson:
… [crosstalk] that part… How we get to the point with the analyst.

Gil Allouche:
Exactly [crosstalk]. But starting with hating you and putting a lot of frets on you, it’s probably even more controversy started. Why do you think they did that?

Dee Anna McPherson:
Yeah, so you’ll [crosstalk] edit this part, But yeah, so we launched with a lot of attention, there was a lot of conversation, people had opinions about us. And so in a way that was good, because it brought attention and it actually attracted people to use and try the software.
The other thing that it did is it encouraged all these IT people who were trying to figure out how the heck do I manage the software that’s made its way into my organization. They would call the analyst and say what should I do? And something I learned going through that experience at Yammer is, if you want an analyst to create a wave or a quadrant on your space, one of the big factors is the inbound call volume that they get from their paying customers.
And because they were being inundated with calls from IT people saying, what the heck do I do about this Yammer? That got their attention. And then it was sort of a long process of kind of trying to sell them on our point of view and why the old way of doing things, forwarding information by email or going to a company intranet was the old way of doing things and there was a better way.

Joe Chernov:
Like call your Senator to get [crosstalk]-

Dee Anna McPherson:
Exactly. It’s like lobbying. I mean, that’s really very much-

Joe Chernov:
Really is.

Dee Anna McPherson:
… that’s what, we actually used to refer to it as that constant campaigning or lobbying, trying to get them to see our point of view. And we said the biggest risk with any software deployment is that people won’t use it. And so we take the risk out of it by getting people to engage first, before you actually have to upgrade and pay. And so we would just hammer on that.
And generally the way the companies that do well in a wave or a quadrant are the ones with the broadest feature set. And our perspective was, no, these bloated piece of software that’s in the rear view mirror, it’s all about engagement, it’s a new ROI, you want people to use it and you got to slim it down.
So we lobbied for two years to get them to change the criteria, because we said we’re not going to put these other features in our product. And they finally came around and did create a new category and they called it enterprise social networking which is what we dubbed category.

Joe Chernov:
That really reminds me of a analyst experience I had. I’m pausing because I’m trying to think if I want to withhold the company name, I’m going to withhold the company name for now. It was MQ season and we were in the right category, and we realized it was very difficult to move your dot, once your dot was placed, you will forever live with that placement. I literally had tracing paper and I had every year’s MQ and I stacked them up and all the dots stayed in the same freaking spot, they moved imperceptibly.
And so we said, all right, this is what we’re going to do, we’re going to have the analyst come in and we’re going to know the dance and they’re going to know the dance, we’re going to pay him to come in and air quotes, consult with us for a day. And really that means the CEO gets to walk them around the building and hobnob and he gets a sense that he’s contributing to the future direction of the company. And ultimately all we really want to do is kind of grease him a bit, both in terms of paying the consulting fee and ego stroking.
And so we had him for a whole day and [inaudible] was $40,000 or something at the time. And it’s like one o’clock and he looks at his watch and he was like, guys, my girlfriend lives in town and I’d like to go visit, you mind if I bail out of here? He knew it was all baloney, he knew that this was all pretense. And so the MQ comes out, we’re in the same spot. And I said, look, we gave you every customer, we answered every question, how do we not move? We’re twice as big as we were last year.
And he said, Oh, I take all of that data, and that contributes like 50% of your placement. And I said, what’s the other 50%? He said my opinion. And so wherever they moved us, he would just move us back. And the only way to break out of this was to get in a new MQ.
And so we went through the organization and briefed a bunch of adjacent analysts. And one of them was like, I’m thinking about this new space and I’m not going to go into detail, because I don’t want to illuminate anyone. And the person was like, and I’m thinking of calling it this, it was never a term we used. We were like, that’s a brilliant term, you should use that term. In fact, we’re going to put all of our marketing might behind that term. We think you should do an MQ on that.
Remember, where you’re placed at the beginning is where you shall forever live, or that at least at the time it was. And so we were the champions of that first MQ, because that was our best shot for an upper right placement. And low and behold, that’s what we got. And low and behold, the company exited on the back of that magic quadrant.

Gil Allouche:
Fascinating. So two different approaches completely, one is lobbying, almost pissing them off and getting inbound phone calls to change your mind. And the other one is just jumping in a different person to going after a different term altogether, because it doesn’t matter how much you dine them and pay them their protection fee, they still don’t take you to the right place.

Joe Chernov:
Our $40,000 is a rounding error, Blue Cross Blue Shield is who they care about, right? They don’t care about some venture backed SaaS company, we don’t have enough money to get their attention, Blue Cross Blue Shield or the like, right? Has enough money to get their attention.

Gil Allouche:
This is a hack, I mean, those two are hacks, right? I mean, this is how I look at those, getting, because these are tactics that you can deploy, you can say, Hey, customers, you love us, you have put 200 reviews on G2, can you pick up the phone or send an email to this gentleman? Or if you have Forrester, did that lady and say what you think, or you go to the biggest customer you have and tell them, what do you think is a good name for this category? Awesome.

Dee Anna McPherson:
I’ve heard a new term recently, community led growth. And now when I think about that, I’m like, that’s kind of, that played a big role with both Yammer and Hootsuite, and getting really close to your customers and having a really active customer community where they’re also helping each other figure out if you’re truly doing something new, they’re helping each other find their way and then you can stay really close to them.
And then really make them the poster children for something that’s new and innovative. And with Yammer, the way we kind of turn things around with IT is we decide, okay, we need to get to them early and often, and we need to make them see that this is kind of the way of the future. And we found a few CIOs who saw this as an opportunity to really raise their own personal profile and attaching themselves to something new and innovative.
And we had a few customers, there was one, not a CIO, but a customer from Deloitte digital, he literally within one year did over a hundred speaking engagements, talking about Yammer. Most of them were on his own, he’s a high profile person, but it was something new and innovative and it was an opportunity to elevate himself. And we found a couple of CIOs as well, and we just got them out there, and then they became active in the community and people saw their profiles really raising and other people were like, I want to do that too.
And then their customers were just sort of almost knocking your door down to want to speak at your events and participate in your marketing activities. And then also talking to the press and analysts. So I highly recommend building that customer community from the get go.

Joe Chernov:
At Eloqua, we prep walked Megan Eisenberg, a very prominent CMO now, to every single event. Megan Eisenberg had Eloqua handlers with her at all times. And we picked a good one, right? She’s maybe the best marketer in tech, one of the top five in B2B and we were in the star making business a bit.

Gil Allouche:
Interesting. How do you create a community? How do you get that gentlemen from Deloitte or Megan Eisenberg to, in a non artificial way, How do you get that community up and running, to actually act on your behalf, to do a hundred speaking engagements a year, [inaudible] talking about your brand. That’s unbelievable. How do you get to that situation as a startup?

Dee Anna McPherson:
Do you want to start or you want me to?

Joe Chernov:
You go for it.

Dee Anna McPherson:
Okay, I’ll go for it. So in the case of Yammer, we created an online community and we actually used our own product to do that. And there was a lot of, and it’s very actively community managed. So we had two, and I think at the end maybe even three full-time community managers, active spawning conversation, we had our products, people, we had our executives. So that was really orchestrated in that community, and then through physical events as well.
At Hootsuite, that was another big part of the strategy, the customers were social media managers, so they wanted, by nature they were sharers, they wanted to get out there and talk. And if you could empower them, give them content, they were looking to grow their follower count in social. So we would just send them really interesting content, and we actually used, we used Influitive and I think you have an association with Marc Organ, so that was his company, we were one of their earliest customers. And we used Influitive to kind of manage our program there.
And at Invoca we have, it’s more enterprise centric, so 300 customers, we don’t have millions of end users, it’s a more of an enterprise product. So we have a customer advocacy program and we just really actively engage with them, there’s executives who kind of pair up with customers and we have a team internally managing customer advocacy.

Gil Allouche:
Very cool.

Joe Chernov:
I operate out the premise that everyone is terrified. Imposter syndrome is rampant in tech. People get titles prematurely, it’s filled with a lot of youth and it’s changing nonstop. And the sense of feeling left behind is real and acute. And the best way to create a community is to understand that, not to exploit that, but just to understand that everybody in the room is terrified, including the person in front of the room, because man, it’s hard to keep up.
And so if you can get customers and prospects together to talk about something meaningful and that something is at the forefront of change, and you can address their unspoken concerns, the concerns that they’re like feel, but are afraid to give voice to, but you can give voice to it on their behalf, and address it on their behalf and address it from fellow practitioners, not you just pick up the tab as the brand? Your job is to pick up the tab and to bring together the people on the front lines and then let them do the work for you. That’s how a community is built, it’s built on the back of people that know they need to keep up with change. And then the front line folks that are actually implementing that change. And then as a brand recede behind the curtain and just pick up the tab in the end.

Gil Allouche:
It’s really cool. I’m writing it down, by the way, if you hear me typing down things is because I’m writing down some things as hacks or just good, best practices that I think we’re extracting here. Let’s change gears a little bit. Maybe Joe you can share first. Tell me about a moment that was in the category creation path, in the work of creating or defining a category that you felt was a failure or some critical moment, not of success in that path. Do you have a lot to think from, or is it scarce?

Joe Chernov:
Well, it’s adjacent to category creation, it’s adjacent to it. And so hopefully it works, but it was a colossal failure. The question is, is a category creation enough for your question? We’ll go with it. I was at a company and we were creating a category, and in this case we actually were creating a category. I think a lot of category creation is basically redefinition of something that already exists, not really category it’s new brand, but in this case it was real thing.
As it turned out, it wasn’t a category that was big enough to justify being a category. It was a category, it just wasn’t enviable in size, right? But nevertheless the category was interesting enough that it got the attention of one of the three best known brands in all tech. And that brand moved to acquire us, and they moved to acquire us on the back of a Forrester wave, and it was a Forrester wave on that category.
And it was going to be, change your life outcome for me. And a lot of the work was on the back of marketing, right? Because it was really on the sales report. So we’re going through the process and you can see it playing out, all the diligence and God, these interviews, and it was like getting into Stanford, it was really a disorienting deal. And you knew at some point the worm was turning and it was going sideways. And you could just feel this isn’t going well. We went from having dinner together to being at odds in opposite sides of the tables, we weren’t going to get it.
And finally, they sort of showed their hand and they were like, we love this category, love the topic, you guys are top player, I’m like I don’t know, we’ve done weeks of diligence and it’s not adding up for me, I’m not getting it. How did this come about? And I was just way too honest, and I said, Oh, my entire marketing program has been built around working that analyst to write the report. And I should have never said that, it was the stupidest thing I possibly could have said. I basically leaned into his concern and validated it and I could see on his face, dead man walking, this thing is over and the acquisition didn’t happen. Subsequently I exited successfully.

Gil Allouche:
Well, first of all, cheers to that story, it was a bad story. Thank you for sharing that. I think that’s great. You learn from those moments the most. You probably just helped my future self in some similar situation, I’m going to definitely remember that story. So thank you, that was a great story. Dee Anna.

Dee Anna McPherson:
Yeah, I mean, I think back to my time at Yammer, we were acquired by Microsoft in our fourth year for 1.2 billion, so that at the time seemed like a phenomenal exit. And at the time Salesforce had been entering the category they’d launched with Superbowl ad. And I think it sort of maybe spooked us a little bit into exiting the category too soon and now you look and see Slack’s come in and dominated that category and had a $27 billion exit.
So, I think getting nervous about competition, I would say that in an emerging category, competition is actually good, it’s growing the category and I wish we would have held on.

Joe Chernov:
Yeah, isn’t that a thing though? This is one of the weaknesses of entrepreneurs, is they know cerebrally, category creation good. But then emotionally it’s like, wait, why is my competitor using our terms? And as a marketer, you got to be like, no, no, no, that’s a good thing, but they’re like, no, but this is ours. It’s like, yes, but the only way for it to be a category is for somebody else to take that term and to beat us over the head with it. We have that, that’s like an occupational hazard of creating a category and that’s sort of the CMOs job in some ways the category creation is reassuring the founder that that’s a good thing and a necessary thing.

Dee Anna McPherson:
Yeah, definitely.

Gil Allouche:
So, if I hear you correctly, exiting that category just because of the nature of the M&A was what you’re almost regretting on here?

Dee Anna McPherson:
Yeah, I mean, look, I’m not complaining, it was very successful, it was a very successful outcome, so I’m not complaining. But in hindsight you’re like, Oh, it was bound to be huge, so it would have been fun to stay in and fight it out.

Gil Allouche:
Yes, yeah-

Joe Chernov:
[crosstalk] dilemma you might never have the conflict though, right?

Gil Allouche:
Interesting. Sometimes those acquisitions happen for a reason, the 1 billion was not for nothing, they probably thought the same thing. It’s interesting what you said about emerging categories and how the founders are paranoid about competitors. I can confirm in my end or deny, but there is definitely the… When you see a competitor that is gaining momentum, especially in a category that you play, it is a little nerve wracking, but it is also a huge deal because it validates the fact that you’re even doing something meaningful versus just doing something on the sidelines.
So, it’s interesting how you say reassure the CEO, I guess if you have a path to tell the founder or the CEO that there’s a plan to get ahead, I think it’s all good. I mean, the end of the day, that’s exactly what you want to happen, but easier said than done. There was maybe Dee Anna you can share a story where you woke up in the morning and you thought we were making progress on these categories. Something’s happening, I think we just got our first green signal that the market is converging or the analysts are finally agreeing with our message.

Dee Anna McPherson:
Yeah, I think from a category perspective, the big win is getting the analysts to see it as the way you see it. So I would say that’s a big win. And I also think the category is developing when you start seeing just more inbound demand for your product. In the initial years, it’s heavy lifting, and once you see people, they’re just hearing word of mouth from other people that this is something that you have to have, and it starts becoming a budgeted line item, it’s no longer a pass the hat, getting people to try to find budget within the organization then you know your category has arrived.

Gil Allouche:
You mentioned the analyst is the first one, you mentioned analyst first and inbound demand second. Do you-

Dee Anna McPherson:
Wasn’t chronological, I think those are just two… for me, those are two things that happen when you know, all right our category has arrived.

Gil Allouche:
Do you think you can create a category in today’s world without the analyst’s consent?

Dee Anna McPherson:
I do, I mean, if customers are willing to pay you for it, sure. And I don’t think that analysts are really a top of funnel thing. Okay, here’s a way, now everyone’s going to go out and buy the product. I mean, I think first you need to get customer adoption first, and if there’s movement in the market, then the analyst will follow.
So, I think the first thing you want to do is focus on getting traction, that’s number one and that should always be your primary focus is serve your customers well, give them value and everything else will fall in line.

Joe Chernov:
Yeah. I think the importance of analysts is proportionate to how far up market yourself. Klaviyo is one of the hottest companies in tech and they sell to very small direct to consumer brands. If they got a very small direct to consumer brand is subscribing to gardener, no. So they don’t need an analyst, because the guy that makes cool wallets or the woman who makes beautiful iPhone cases, they’re not reading waves and MQ, so it doesn’t really matter there, right?
HubSpot [inaudible] analysts for the longest time, they probably don’t anymore, but when I was there, they did.

Gil Allouche:
Meaning they ignore them or they didn’t work with them?

Joe Chernov:
They resented them and didn’t work with them and made it public. And they said, analysts can be bought and that’s why we’re going back in G2 cloud. The dirty little secret was analysts didn’t think highly of HubSpot, because its product wasn’t as robust as everything else, and so HubSpot decided to turn the tables.
But the HubSpot category, Inbound was a thing, I knew Inbound was a thing, not because of analyst report, but because I was at a pool one day and I see this couple laying in their chaise lounges, and one of them is reading Michael Lewis, The Big Short, and the other is reading Halligan and Dharmesh’s, Inbound. I’m like, that’s a thing, right? This is happening.
And so sometimes it’s just pointillistic, you see these little vignettes and you’re like, something’s happening here and you don’t necessarily need the MQ. The big value of the MQ is enterprise and M&A.

Gil Allouche:
Big value of MQ is enterprise and M&A.

Joe Chernov:
Yeah.

Gil Allouche:
Let’s switch gears. Outside of category creation, choose a moment that… We call it quite interesting stories that way. So I have to ask this question because it’s always full of magic. And Dee Anna, your hashtag fail moments was not to failure. So I’m going to double down here on the embarrassing story. Tell me an embarrassing story from your, let’s say 10, 15 last years as a professional working in companies that created category that did a lot of big deals and moment of great embarrassment.

Dee Anna McPherson:
Oh gosh, I have to think about that. Well, I can tell you, I mean, this isn’t in my last 10 to 15 years, this was very early in my career and I will never forget it and it was a huge lesson. This is a very tactical mistake, but early in my career, I started in the PR world, and I was pretty junior in my career and I came up with this idea for this press. Back then we did press conferences. IBM was, there were speculation they were going to make a big acquisition. My client was actually Gartner. Gartner was my client.
And I said, we’re going to call a press conference, I’m going to have commentary on it and we’ll be all over the news. This was pre-internet and we put out the news alert for it. We got press from all over the world, hundreds of press signed up for this. I’m sitting in Renee Edelman’s office and she’s telling me what a great job I did, this was all my idea, I started that. And then the phone starts ringing off the hook. I had the wrong phone number, dial-in phone number for this press conference. I had hundreds of reporters calling in and it was the wrong number. And this was before email, this is when you called and faxed people.
So that was a great lesson, an attention to detail, it’s like the nitty-gritty little details will get you in the end, so I will never forget that.

Gil Allouche:
Oh man, that was tough. There was no email, no reply to all, so you just use this added Zoom link. What’d you do?

Dee Anna McPherson:
[crosstalk] we got dozens of people calling up all these reporters and giving them the new phone number. That was crazy.

Gil Allouche:
It sounds like a scenario for a movie. Joe Chernov, what’s your story?

Joe Chernov:
Well, we got a lot of them. When I was at Eloqua, we produced, it was sort of in the era of a lot of the rise of visual content and infographics. And we created this infographic that was inspired by to take on Marshall McLuhan’s, The Medium Is The Message. And it was about the rise of influencers, and we released it at South by Southwest. Months of research had gone into this thing and I moderated a panel and it had a who is who of influential figures at the time. And I’m dyslexic.
And so it should have been, it was about the rise of influencers, so we were turning the message into the messenger, and that was the twist on the Marshall McLuhan. So it should have been the medium is the messenger. But being dyslexic, I transposed the whole thing and it was the messenger is the medium and it just garbled the whole, it inverted the meaning and everything, and months of work. And nobody compare the title of the book to what the title of the thing was.
And so I’m moderating this panel and because I’ve got all these marketing muck [inaudible], I’m actually nervous and I usually don’t get nervous. But I’m actually nervous, and so my voice is breaking, it’s not going great. And then the first question somebody asks is they stand up in the audience and they’re like, did you invert the Marshall McLuhan book… And the very first question, I’m like, Oh my God, look, I’m dyslexic, I got a thing, I flip flop things, all that, it was brutal [crosstalk].

Gil Allouche:
Oh God.

Joe Chernov:
That was probably it.

Gil Allouche:
Real stories, I like that. Thank you. Thanks for sharing. All right, let’s take a break, and have a drink, I know I need one. So, if your drink is empty is good time to… I know you’re drinking beer, Joe, so maybe pick up another one. [crosstalk] you’re behind. Cheers.

Dee Anna McPherson:
Cheers.

Gil Allouche:
A lot of CMOs, you were talking about building an audience, I think earlier on Dee Anna, you were talking about building that community. Who was it Dave Gearhart from Drift, now is a different company. Was talking about an audience, building an audience, building a community, Anthony Canada as well as Nick Mehta from Gainsight was here talking about building a community and finding the persona, right? For them, it was a customer success manager that didn’t get much love making them a first-class citizen in their organization, putting content behind it, best practices on so forth.
Did you find that to be… I know you mentioned Dee Anna that that’s one of the things you did at Yammer, I think at Hootsuite as well, using the platform. Did you find any way … then you use the Influitive? So you had a piece of software to help you with that. Did you find any tactics or best practices to set up a community like that to be almost self-sufficient, growing by itself or inorganic? Or how do you tackle that the project? At what stage do you do allocate yourself to it?

Dee Anna McPherson:
Yeah. When you have millions of users and you’re inviting a large community, you cannot expect it to be self-managing and you also have to expect the first six months of creating this online community to be incredibly painful. And we really would have to set expectations with the executives and especially the product people, because oftentimes they’ll first come into a community and sometimes the customers will think, well, okay, this is my opportunity, I’m going to really try to influence my thoughts on the product or complain about things, or think of it as a support community.
And even though you would try to manage that, it was going to happen for a while and you just had to expect that, and then you would start to turn it into a more productive conversation where it’s not about support questions, but this is a community helping each other.
So it takes active management, and I think you need a really skilled person to manage it. If you just put it out there, either it’s going to fall flat and people aren’t going to engage or they could come in and sort of beat you up to lobby for the features that they want.

Gil Allouche:
Okay. So very intentional, at what stage did you… You said you had millions of users. So that was fairly late in the [crosstalk]-

Dee Anna McPherson:
No, because they were both freemium products, so we had millions of users before we had a whole lot of revenue. So that was the case there.

Gil Allouche:
Got you. Joe, you mentioned your Pendo to be the, I think you call it product, or the stack for product, for VP of product or the product team. Did you work on a community? Do you work on audience your own movement?

Joe Chernov:
We do in two ways. One is we have a user conference that has the greatest name of any user conference in any company. And I can say that because I didn’t name it and it was named before I arrived. And the minute I heard it before I was here, I was like, my God, that’s a genius thing. And so Todd Olson, our CEO named it Pendomonium. And Pendomonium is our user conference.
Now, this year Pendomonium is a little different, right? Because it’s virtual. So this year, it was a little bit less about how to become a better Pendo user and a little bit more of about a brand event. But we build that community around helping people become better product professionals. And so it’s never going to be as wide as a company with a million users, right? It’s never going to be that broad. Everybody in a company needs to communicate, but not everybody in a company needs to build the product. And so this is more narrow and deep.
Then we have a second community called Product-Craft. And my predecessor guy Jake surfmann deserves all the credit for product craft, that was not my idea, that was Jake, and he did an unbelievable job. And Product Craft is less about being a great Pendo user, and it’s more about the passion for great product and it skews toward the people behind those great products. So we have more of a wide and shallow and more of a narrow and deep. And those are our two communities.

Gil Allouche:
Interesting. They work in parallel? No conflict? You just run those two programs essentially in parallel?

Joe Chernov:
Yeah. I mean, there’s some overlap, but not conflict. And it’s funny, we just were talking about this the other day. I think three of the speakers at our first Pendomonium now work here. Pretty good recruiting strategy, expensive recruiting strategy, but pretty good recruiting nevertheless.

Gil Allouche:
Hopefully that was the contract with the employee agreement. We’re getting towards the end of the podcast. I wanted to ask you a few questions as marketers that are maybe a little bit outside of category creation. What do you think… You both work for B2B companies today. What do you think as a CMO, what today with a lot of data, a lot of technology, a lot of access to creative and content and very wealthy marketing especially for both of you, your experience, you have teams and technology in allocation. What do you think is the most important traits that a CMO in a B2B company should bring to the table today?

Joe Chernov:
I’ve been actually thinking about this very question. I’ve been thinking about the difference between a VP of marketing and a CMO. And the difference is time horizon. If as a CMO you’re living quarter to quarter, you’re thinking about the next 90 days, you are an underpaid head of sales. Your job as CMO is to not be thinking about how you’re going to make the next quarter or Q plus one or Q plus two, It’s how are you going to go from, if you’re at 50 million, how are you going to go from 200 to 800? If you’re at a hundred million, how are you going to get to a billion. That’s the CMOs job.
And to find people that can run the day to day, that can worry about Q plus one, Q plus two, Q plus three, so you don’t have to. And then you spend your time worrying about how you’re going to double a couple of years out. I think that’s the difference, and I think the key to becoming a successful CMO is to put in place the team that can give sales what sales needs so that you can focus on clearing a path for the bigger picture down the line.

Gil Allouche:
Dee Anna, do you agree with that?

Dee Anna McPherson:
I do, I think that’s a great perspective. I think marketing of all the departments in a company, you really almost have the broadest range of skill sets. So you have really quantitative people, you have technical people, you have the creatives, you have the storytellers and everything in between. And other departments, you have front end engineers or back end engineers, but they’re all engineers, same with HR people.
So the marketer has the toughest job in the company. You’ve got this broad set of responsibilities, but I think that I often get asked, Oh, should a CMO be demand gen oriented? Or should they be a product marketer or should they have what background? And I think that’s the wrong question to ask, I think a CMO really needs to operate almost at a general manager level. You need to have people who are strong at all the functions, but you really need to be at the core of so many different things that the company is doing.
And so I like Joe’s perspective around operating on a different time horizon, you really need to have strong deputies at each of the different functions. And you need to think about that overall customer experience, developing the market, understanding what’s happening in the broader market so that you can help set the strategy.

Gil Allouche:
Interesting.

Joe Chernov:
That’s such a perfect response Dee Anna. I called when I took over this role and demand gen wasn’t exactly where it needed to be and I was sweating that. You almost have to earn the right for the longer time horizon. And I called Kip Bonder at HubSpot, HubSpot CMO. And I worked really closely with Kip when I was just good friends with Kip, Kip’s really a special guy. And I’m like, dude, you got to help me out. How do you, this is Gazillion dollar company now man, how do you focus downstream when there are all these… or upstream when there are all these downstream intense needs? How do you balance them? He said, I don’t. I hire people to worry about the downstream issues so I can focus upstream.
It was the seminal conversation that left such an impact on my outlook of the job. Whereas there’s no way you could do both. So you have to declare a major and then you have to hire people to do the other thing and get out of their way.

Dee Anna McPherson:
Yeah, absolutely.

Gil Allouche:
Live in the present or fix the present so that you can live in the future. That’s sometimes the balance that we have to keep, that’s very true. Wonderful. Any last final words for our audience? As a reminder, most of our audience are entrepreneurs, CEOs, CMOs, and VPs of marketing that are still trying to understand what their job ends and where the CMO job starts but all of them are looking to learn how to create a category or think distinguishly whether they shoot or not. Any final words for them?

Dee Anna McPherson:
I mean, I think the biggest lesson is you’ve got to be bold. I mean, you just really have to be bold when you’re creating a category you have to have a strong point of view and you’ve got to get people to agree with you. And you don’t do that by anything other than having a very bold perspective and getting people excited about the way you see things developing.

Gil Allouche:
Lovely, love that. That’s very true. It’s sometimes easier said than done.

Joe Chernov:
I’d say that people are going to push you to create a category because that become a reflexive position, but it’s not binary, it’s not create a category or be run off the mill. Right? That’s a false choice. You can expand the category, you could combine categories, there’s a lot in between. And so I would say, be intellectually honest and ask yourself, am I replacing somebody else that’s a budgetary line item? Or is there no line item for what I sell? And I’ve got to create one.
If there’s no line item for what you sell, category creation might be the way to go. If you’re going to replace an incumbent or are you going to replace a way that they’re currently doing something, then maybe category expansion is what you want to do, a category redefinition, right? But it’s probably not creation.
And so your company doesn’t suck if you’re not creating a category, you could do plenty well in redefining one. So I would start with that binary, are you replacing a budgetary line item? Are you creating a budgetary line item? And that should inform some decisions.

Gil Allouche:
That is super insightful. I think there’s a simple question and not an easy one to tackle because there’s a lot of you getting skewed to sometimes do it anyway, but that’s very interesting. Thank you for that. And thank you for participating, I really enjoyed these episodes. You have a wealth of knowledge, both of you. I wrote down a lot of content. Some of it I’m going to do myself and the rest I’m going to share all of it with the audience. Thank you for a really good insight.

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